We’ve noticed a really unusual real estate trend lately as families look for ways to increase their cash reserves by selling off long-held properties.

They’re not selling vacation cabins or those condos they bought as investments. Frankly, the residential real estate market has not recovered enough for anyone to make decent money doing that.

Instead, some clients are raising quick cash by selling off family burial plots.

A Really Grave Decision

According to a recent article in the Wall Street Journal, “Selling the Family Plot” (http://digg.com/u1DU4w), cemetery and funeral property web sites are reporting a burgeoning marketplace for the sale of burial plots. As the recent economic meltdown got worse, people started liquidating these assets to make ends meet – or simply to make a profit.

For instance: A couple bought a double plot in 1990 for $1,500. Today, a cemetery might sell the same plot for $4,500. If the couple unloads those plots on the secondary market, they could raise as much as $2,800.

That might be enough for cash-strapped families to decide heaven can wait if they can get back money that they can use for bills they need to pay now. This is one possible strategy to consider if your family needs to raise some quick cash.

Many plots have been held by the families for decades and can be sold for a great deal more than was originally paid. The WSJ article said plots sell quickest and cost the most in places where people tend to retire – such as Florida, Arizona, Texas and Southern California.

Some sellers have been known to offer previously occupied plots that are near or next to the resting places of celebrities. The crypt above Marilyn Monroe went up for auction on Aug. 14 and resulted in a final bid of $4.6 million, though the offer, from Japan, was later rescinded.

Existing Tenants

Is it too late to take advantage of this strategy if your family owns a multi-plot property that was partially used? In most instances, you can still move those remains to another single burial location and then be free to sell the larger family plot.

I caution you that that this isn’t as easy as posting a Craiglist ad or putting a “for sale” sign on the plot. You need to check with the cemetery to find out what the rules are.

Most allow owners to sell plots on the secondary market, but sometimes a cemetery will buy it back. Many cemetery operators reported their buybacks increased exponentially over the last year.

Flipping ‘Plot-perties’

On the other hand, now could be a great time for investors to buy burial plots for future sale and profit. With so many plots coming onto the market, sellers may be more willing to negotiate on prices.

Buyers need to ask what’s included in the price. Some properties will include burial costs and headstones. Just because you buy the land, doesn’t mean you won’t have to also buy an underground crypt.

As always, I hope this article has helped you and your family. If you have any concerns or want to talk about a specific case, please contact our office.

Health care reform dominates the current political and media landscape. The only clear direction out of Washington appears to be a one year band-aid to patch the no-estate tax year of 2010 with a $3.5 million exemption for one year.

The logic of the band-aid strategy would be to capture the revenue that would be lost and defer any significant thinking and legislation until next year?

Your guess is as good as anyone’s.

The future of the Federal Estate Tax remains clouded.

We have been keeping our ear to the ground (actually we have been calling people and searching the Web for clues) to help our advisors predict what will happen with the Estate Tax.

As most of you know, under the 2001 Economic Growth and Tax Reconciliation Act, the Estate Tax is scheduled to be repealed. There will be no tax in 2010, and if lawmakers do nothing (please, no jokes), the Estate Tax would be back with a higher rate of 55 percent and an exemption of $1 million.

Rep. Earl Pomeroy (D – N.D.) , a senior member of the House Ways and Means Committee, was quoted on TheHill.com as saying it’s time to end the “hokey-pokey” Estate Tax code and provide continuity for planning.

When you first opened your business, growth seemed inevitable, right? You found a recipe for success and you stuck to it. You advertised, you networked and you worked very hard to produce a quality product or service that people need.

So why does it seem that while your efforts haven’t changed your business isn’t growing? Whenever entrepreneurs feel caught in a rut, they should take that feeling as a call to action.

I’m going to share two ways you can kick start growth into your business.

First, write down your top 10 customers. Now pick up a phone to interview them.

Ask them the following:

1. Why did you choose my business to serve you?
2. What do you like about my business?
3. What do you not like?
4. What are some issues or obstacles are you concerned about and how can I help you overcome those things?

After you’ve spoken to them, go over your notes. What are their backgrounds? Do they have similarities beyond the surface? How did they find you?

Determine from these interviews something about their demographic and why they need your business. Once you know these factors, brainstorm ways to clone these kinds of customers. In other words, figure out how to reach prospects that are just like your best customers.

Second, repeat this process with your top 10 referral sources. Who sends you new prospects? Who sends you the most? Who sends you the most profitable ones? If you aren’t already tracking such things, do yourself a good service and start now.

Ask your referral sources the following:

1. Why do you send your clients to my business?
2. What benefits do you get out of our relationship?
3. Is there anything I can do to make your job easier?
4. Tell me about your average customer and their needs.

Whenever you offer to help a current customer or a referral source with a problem, you are more likely to pick up new work from them. This isn’t always the case, but more often than not, it does happen.

When we die or become incapacitated, the strategic planning we’ve put in place to provide for loved ones goes to work. The important things will be taken care of.

Our bills continue to get paid, out investments continue to grow for future generations, and any minor children are cared for by loving guardians.
It seems like we’ve thought of everything, but some of us risk forgetting about our very dependant four-legged family members.

What Happens to Fluffy and Spot?

Some pet owners never consider who will care for their furry companions after they die or if they become disabled or seriously ill. Many assume a relative or good friend will step up to the task.

That’s an unwise assumption on the owner’s part and one I’m sure Fluffy and Spot might especially take issue with.

Every year, the Society for the Prevention of Cruelty to Animals (SPCA) takes in a number of animals whose owners passed away. Usually a family member or neighbor drops the animals off. Most apologize and say that their loved one or friend made no plans.

Once cared for and loved, these animals have no home. Many will likely be euthanized.

Even Pedigrees Won’t Protect Them

Here’s one vivid example from an SPCA brochure that illustrates the need to make better plans:

One day a group of seven pedigreed dogs were dropped off at an SPCA: two Whippets, two Irish Setters, two Toy Fox Terriers and a Chihuahua. They came with AKC papers, newspaper clippings from when they were purchased, complete family trees and a thick file of medical records.
It was obvious their owner loved and treasured them, but when she was diagnosed with cancer she did not make plans for their care after her death. There was no chance that all these dogs that were raised together would be adopted to the same home.

A little planning today can help your pets avoid a similar fate.

Making Better Plans for Pets

Here’s a checklist to help you plan for your pets:

• Identify and designate someone (and at least one alternative) to assume ownership for the pets.
• Keep in touch with this person to ensure they are still willing, especially if a pet has special needs.
• Carry a “pet alert” wallet card listing names and phone numbers of the pet’s emergency caregivers.
• Authorize payments to provide food, veterinary care, grooming, exercise, socialization, etc.
• Use language in any documents that refers to “pets” rather than names to ensure no newly added pets will be left out and there is no need to update documents.
• Name a Trust Protector to oversee a pet’s new owner and any funds set aside for the pet’s care.
• Ask an attorney how to include language that will protect the pet in estate planning documents.

There are additional considerations to make, including deciding the criteria to be used to determine when it’s time to euthanize a sick pet, who will make the difficult decision and how that pet’s remains should be disposed.

I hope this article helps you and your family. As always, if you have any concerns or a specific case you’d like to discuss, call our office.

This year, I provided you with a kind of “cheat sheet” that explained some basic Trust terminology, followed by a second article that defined an Irrevocable Life Insurance Trust (ILIT), a Qualified Terminable Interest Trust (QTIP), and an Intentionally Defective Grantor Trust (IDGT).

This is the third installment in our series on basic trust terminology.

The goal is help you better understand estate planning and asset protection and without feeling tripped up by complicated legal words or phrases.

Complex by Design, but Easy to Understand

There are many different kinds of trusts in the marketplace that can accomplish everything from shielding your  heirs from creditors and divorce to protecting a special needs child long after his parents are gone.

As complex as their functions can be, these Trusts are not difficult to understand.

Here are definitions for some of the most common Trusts you may have heard about:

1. Lifetime Protective Trust: When a client leaves an inheritance to a child outright, it can be subject to the child’s creditors, former spouses, addiction problems, inability to manage money and a Federal Estate Tax on the child’s estate.
   Leaving an inheritance in a protective trust will shield these assets from such predators. They can be designed to become dynasty trusts, which can provide protection for generations.
2. Testamentary Trust: This trust is contained in someone’s will. It comes into existence upon a Trustmaker’s death and is subject to probate proceedings.
3. Special Needs Trust: This is established to benefit a child with disabilities and who is entitled to government assistance, such as Social Security disability payments. An inheritance held within a special needs trust will not disqualify the child from receiving the assistance. Distributions are made at the discretion of the Trustee for the child’s special needs. The trust can be stand-alone or be a sub-trust of a revocable living trust.
4. Asset Protection Trust: When a Trustmaker puts assets into a revocable trust, the assets are not protected from claims by the Trustmaker’s creditors or lawsuits. Several states now permit Domestic Asset Protection Trusts (DAPT), which allow a Trustmaker to transfer property into an irrevocable trust of which he is the beneficiary.

If the statutory requirements are met, then the assets within are protected from predators, usually after a certain time period has passed.

Online Estate Planning Dictionaries

Here are some great resources for Trust term definitions:

NOLO.com’s online wills and estate planning dictionary http://tinyurl.com/cuflru.

FindLaw.com’s online estate planning and probate dictionary http://tinyurl.com/ch7t5o.

I hope this article helps you and your family. If you have suggestions for other terms you’d like to see defined, please forward them. As always, if you have a question or concern about a specific case, please contact our office.

IIf you are a business owner, then you understand the importance of earning a client’s trust. They want a sense of your integrity and experience level. They want to know your motives are not just about making a buck and that you will look out for their best interests.

When you create a Revocable Living Trust, you must choose someone to assume the role of Trustee after you die or if you were to become incapacitated. Of course, this decision is not as simple as picking a favorite uncle or your eldest child. Choosing can be difficult.

What advice can I give you to help you pick an after-death or disability Trustee?

Roles and Responsibilities of a Trustee

First, understand the fiduciary duties of the Trustee. The Trustee manages the assets in the Trust in the best interests of the beneficiaries and makes decisions regarding how assets are invested or released.

You need assurances that your chosen Trustee is a responsible person who will carry out your wishes, make sound judgments and seek out professional advice when necessary.

Typically, this role is assigned to a spouse, relative, close friend, business associate, professional advisor, a corporate fiduciary. Sometimes, co-trustees are chosen from a combination of these candidates.

You Can Keep It in the Family

A relative can be a good choice as Trustee if he or she:

1. Is competent to handle the finances and will follow the Trust’s instructions
2. Has adequate time and a genuine interest to take on the role.
3. Will avoid family conflicts by being unbiased and unemotional when making decisions.

Corporate Fiduciaries as Trustee

Some Trusts are complex or may be designed to benefit heirs for many, many years to come. Banks and trust companies are regulated by the government and can manage Trusts for decades. Their advantages include:

1. They don’t die or become incapacitated.
2. They act objectively in following a Trust’s instructions.
3. They keep good records and have estate administration, tax and investment expertise.

Considering a Professional Advisor

Sometimes a family member, friend or a trust company will not be the right choice for you. They might be unavailable, unreliable or simply too expensive.

This can make choosing a professional familiar with your plans a good choice, providing there is no conflict of interest. The Trustee could be a financial advisor, an estate planning attorney, a tax professional, or a combination of these professionals.

Regardless of who you choose, the basic qualities of a good Trustee are the same: integrity, good judgment, and objectivity.

I hope this article has helped you and your family. As always, if you have a specific concern or case, please contact our offices. We are happy to help.

I always enjoy Andy Kessler’s perspective. He is a former hedge fund manager and wrote a great book called “Running Money.” I am spreading the word about a terrific analysis of the current stock market.

In his Op-Ed piece on the WSJ.com site, “The Bernanke Market”, he simplifies a complex issue. If you are interested in a unique perspective, take a few minutes to read this piece.

It is undisputed that the majority of job growth comes from small businesses.

Logically, one would think that the best strategy in the current economic environment would be to help the small business owner.

However, the TARP bailout funds have been lavished upon major banks, who used the money to improve their balance sheets and pay bonuses to top executives.

But nothing is going into the market to stimulate lending.

I am seeing small business owners having their lines of credit pulled for no reason other than the bank wanted the capital back. It made no sense because these business owners had no defaults on their loans and their payments were timely.

The government’s plan to raise taxes will be a stake in the heart of small businesses. If you are a small business owner, or are employed by a small business owner or just want to see the economy improve, you need to read this analysis available at WSJ.com.

When my dentist will pay a greater percentage of income tax than Google, there is something breathtakingly stupid occurring.

This Wall Street Journal online guide is well written and has lots of good advice anyone looking to hire a financial planner.

Here is a direct quote from the guide’s main points:

• Look for a financial adviser who is a certified financial planner (CFP). They’re licensed and regulated, plus take mandatory classes on different aspects of financial planning.
• Consider the planner’s pay structure. A planner who earns money based on commission rather than a flat, hourly rate could have an incentive to steer you in a particular direction.
• Read the code of ethics that your financial planner adheres to. Look for the word “fiduciary” and language that requires planners to look after your best interests.